Edited transcript of the interview

Alec Hogg: As we record this, it's only three weeks until I'm going to be seeing Dr Iraj Abedian in the Drakensberg, and not just me — another 350 members of the Business Tribe will be there as well. It's going to be quite an occasion. Iraj will then be updating us, no doubt, on his latest views on what's going on in the country of his birth. But today there's so much happening in Iran, we're going to get his insights as well, our resident expert on the subject.

Iraj, as always, so good to be seeing you and chatting with you. Something that was supposed to be quick and over in weeks is now over a hundred days. I'm not sure of the exact number, but it just continues to drag on — from peace talks and the oil price falls, to end of peace talks and the oil price surges. Maybe we can just kick off on where we are at the moment. There seems to be a stand-off now on the Strait of Hormuz. Tell us what the Strait of Hormuz is, please, and then why it's so important, and why it should be affecting the oil price — and indeed Donald Trump's state of mind.

Iraj Abedian: Thank you very much for the opportunity, Alec. Good to see you again. At the moment, the status is literally a tug of war over nothing else but the Strait of Hormuz. The strait is significant for a number of reasons. It's a very narrow strait between Iran and Oman — a passage of about 33 kilometres wide, of which less than half is fit for ocean liners and big tankers. So it's a narrow, very significant waterway through which about 30 to 35% of the daily supply of global oil passes. Sometimes less, sometimes more, but that's the lifeblood of countries like the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain and Iraq — and most significantly Iran, because over 95% of Iran's exports, and anything between 95 and 98% of its imports, come through the Strait of Hormuz. Iran has been trying to diversify to another port, but as we speak, that is a critical choke point for the entire region.

The historic significance is that Kuwait, the UAE, Bahrain, Oman and Qatar were all once part of the Iranian empire, if you like. So there's a lot of political, cultural, religious and historic points of reference among these nations — their lives have always been intertwined, their families going back generations, not unlike South Africa and Zimbabwe, or South Africa and Lesotho. The colonial power in the Middle East and Persian Gulf was the UK, and it drew up these lines. These nations were tribes led by different tribal authorities or emirs, and they've never really been independent for long — the most recent independence, Bahrain's, dates back less than 60 years.

So the significance isn't just about 30 to 35% of global oil. It's petrochemicals, fertiliser, aviation fuel and so on. This has been an issue since the 1980s, when Iraq invaded Iran and the strait was blocked at that time. But back then, the West — Israel included — was on Iran's side, and helped enforce a blockade in Iran's favour to create a choke point against Saddam Hussein. The history has turned the other way round now: Iran is at the point of claiming its historic ownership, or control, of this significant global trade choke point.

Alec Hogg: You make a lot of interesting points there, but the one that landed with me was that it's also where Iran gets its imports from. So presumably, if the Strait of Hormuz is closed, the imports Iran needs aren't coming in either. How relevant is that to the Iranian economy?

Iraj Abedian: Absolutely critical. If the strait is blockaded for whatever reason — insecurity, or God forbid tankers are burned and sunk in that narrow strait — even if people want to trade, it becomes physically and logistically impossible until it's cleared. For the Iranian economy, this is critical. That's why, somehow, the Trump administration foolishly assumed that whatever they did to Iran during the war, Iran would never block the strait itself. President Trump said as much — he couldn't believe they were attacking their neighbours and blocking Hormuz, when it's literally like choking your own throat while pushing pressure on others. Iran is a vast country with many neighbours, but from a trade point of view, closing Hormuz costs it less than 5% of its import capacity, and even less of its export capacity.

Alec Hogg: So was Trump surprised, clearly?

Iraj Abedian: No — interesting enough, the threat of this happening if America struck again had been there for some time. Remember, this attack came on the back of a 12-day war last June, then six or seven months of grumbling and negotiation before war actually broke out again in late February. In that period, strategists in the Islamic Republic were pretty vocal that if America struck again, they'd give them a lesson and regionalise the war — not keep it confined to Iran, Israel and America, but make sure Saudi Arabia, the UAE and Kuwait got involved too. Which is exactly what has happened. I said at the time — I think I mentioned this at the March conference — that this war would not be quick or confined. It was going to spread, and all of us around the globe would feel it. Unfortunately, that's turned out to be the case.

Alec Hogg: I certainly felt it yesterday at the petrol pump. It's usually about a thousand rand to fill my tank — yesterday it was nearly R1,400. I can imagine how cash-strapped consumers, people watching every cent, must be feeling that impact.

Iraj Abedian: Alec, that's just you and I feeling it at the pump. Our farmers are feeling it dramatically — some going bankrupt. Shipping and transport companies too, and we came close to aviation in Europe grinding to a near-standstill. As we speak, one of the biggest threats to the global economy is that if this Hormuz stand-off can't be resolved, we go back to shortages of aviation fuel and, most significantly, food production, because of fertiliser.

Alec Hogg: You started by saying the Americans had a different approach when this began. It's almost forgotten now that 40,000 Iranians lost their lives in the protests — that was what motivated much of the world to support, if not endorse, America and Israel taking action against the regime. That hasn't worked out. Judging by what Gideon Rachman wrote in the Financial Times today, it looks like they may be going back to a regime-change strategy. First — why was that original issue forgotten? And second, is regime change even in prospect?

Iraj Abedian: When the Americans started their attack, they had three demands. First, the nuclear threat — they wanted to resolve enrichment and collect the enriched uranium. Second, they wanted to get rid of the proxy groups, in order of priority: Hezbollah in Lebanon, the Iraqi proxies, and the ones in Yemen. Third, they wanted to negotiate and limit the range of Iran's missiles, because Americans were realistically aware Iran could reach their regional bases and beyond into the Indian Ocean. Those were the three causes for war.

Separately, the Iranian nation had an uprising after the December 2025–January 2026 collapse of the currency, which disrupted the economy completely — inflation ran away, and trade became impossible because wholesalers couldn't replace stock at more than double the price. The United States, as the Chinese say, never misses out on a good crisis: it aligned itself with the popular uprising, assuming the system was now vulnerable, that all it had to do was remove some leaders to achieve its aims.

That calculation proved horribly wrong. From the start, the US had no consistent strategy — it kept changing. First they jumped on the bandwagon of Iranian discontent, then it became about enriched material, then the proxies got bolted on. As Trump's strategy evolved on the run, his emotional reactions caused more disruption. At the very start he was seen as aligning with the human rights of the Iranian majority — no nation likes being invaded, but because of more than 40 years of tyranny, people tolerated it initially. Yet within weeks, Trump was talking about destroying Iran off the map and wiping out its culture, alongside the destructive impact on civilian infrastructure, roads, factories. A million jobs lost, a million families out of income. People got angry.

People are mourning tens of thousands of dead that remain unaccounted for. Numbers like 30,000, 40,000, 50,000 get thrown around, but we shouldn't reduce people's lives to mere numbers. The reality is people are mourning, angry, with no protection, and their own government is their most dangerous enemy. Over 25,000 bombs have been dropped on a country that is 10% larger than South Africa geographically — but concentrated on Tehran and the big cities, where most of the population lives. The trauma, the economic loss, the uncertainty — that's the consequence of a war fought without a coherent strategy.

Alec Hogg: So what are the people of Iran feeling — caught between a regime willing to sacrifice so many of its own people, and a so-called white knight that's acting more like a dark knight and making things worse?

Iraj Abedian: He's neither dark nor black — he's an unstable red knight, promising things based on flimsy assumptions. His administration has such a shallow understanding of the region's culture, particularly Iran's. Iran has 2,500 years of social and political existence, having battled Romans, Greeks, Chinese, Afghans, Turks and the British — a rich history of managing invasions. Geography has also always favoured the Iranian people, since Iran's terrain isn't friendly to invaders. Anyone who knew Iran's history wouldn't have pretended you could build strategy as you go — which is exactly what Trump did. Within three weeks he'd lost the Iranian population's goodwill and hasn't regained any of it. People who thought he was a white knight saw he had his own agenda. That's been a very sad outcome for a people suppressed for 40-odd years, now more suppressed, jobless and facing an unknown future.

Alec Hogg: Given that Trump's non-strategy hasn't succeeded, and Rachman's FT piece suggests regime change is back as the primary plan — is that more likely to succeed than what's gone before? And would it bring the Iranian people onside?

Iraj Abedian: How do you trust someone who hasn't kept a single word over the past two or three years? He was negotiating with the Iranian government while attacking it. He sets deadlines, then changes them. He sets a strategy, then forgets it. And how do you trust someone who's said more than once that he'll destroy the culture, that nothing will be left, that they'll be annihilated? These are statements that suit Texas but aren't a way to win over sentiment in the Middle East. Nobody in that region regards him as a trustworthy partner — not just in Iran.

So the failure isn't just that America has lost this war and failed its stated targets — more importantly, it has lost its stature as a superpower. Ironically, from a historic point of view, I find this rather positive: you have two superpowers, America politically and economically and Russia militarily, both bogged down in what they each thought would be short, special operations. Putin promised the Russian people four to six weeks; now we're seven months on, and this is going to be a long, torturous engagement — not just for those governments, but for the people of Iran and the region. The Arab neighbours are as hurt in terms of future prospects as Trump is.

Alec Hogg: Many South Africans have emigrated to Dubai — the UAE has been almost a magnet, with many South African businesses there. Then there's Qatar, where Sasol has a big gas-field investment, and Kuwait, with a lot of relationship ties to South Africa. And a little further away, Israel. What does all this mean for those countries and the region as a whole?

Iraj Abedian: It means they have to abandon sole reliance on American protection. America's standing is all but shattered, and this is, in my view, the beginning of the fall of the empire in a literal sense. Arab states — Egypt, Saudi Arabia and others — need to think beyond relying on others for protection and build their own integrated, collaborative regional security pact. Over the past three or four weeks, Pakistan, Egypt, Turkey and Saudi Arabia have been intensely engaged in a new security dispensation — a Middle Eastern NATO of sorts. These arrangements take a lot of detailed financial and military work, but the acknowledgement is there: America can no longer be trusted, nor is it able to guarantee protection. War and military domination — by America, China or Russia — is no longer a sustainable means of control in an interdependent global economy. Stability now has to be built on a more collaborative footing, cognisant of the shared interests of nations, regardless of east or west, black or white.

In that context, the Middle East now has to carve out a new security pact among local players — not China, Russia, the US or the UK. The US still has eight military bases across Kuwait, Saudi Arabia and others — to what good? Dubai built its brand as a global logistics and investment hub, but it's now the most vulnerable of these nations. Dubai and the UAE received more missiles and drones from Iran than Israel did, and that speaks to the real, longstanding existential threat both Israel and Iran feel toward each other — a threat the rest of the region is now absorbing more damage from than either of the direct antagonists.

Over the past 30 years, these Gulf states have used oil and petrochemical wealth to build extraordinary development projects. I remember Dubai as a desert town, much like a town in the Karoo. Today it looks like something else entirely. Now, governments and investors there have to shift mindset — coexist with neighbours, most importantly Iran in the short term, and re-engineer their security and economic development. For now, they're losing capital, expertise and companies, which is very unfortunate.

Alec Hogg: So would this new "METO" get together and negotiate a peace with Iran, independent of whatever Israel and the United States want?

Iraj Abedian: It's not that simple. Israel won't sit silent — it's already aligned with the UAE and, further afield, India. So the entire jigsaw of alliances is being rearranged. On one side you have India, the UAE, to some extent Qatar, and Israel. Qatar and Saudi Arabia have long-standing family disputes, so Qatar won't be a reliable partner in a joint pact with Saudi Arabia. Pakistan and Saudi Arabia already have a bilateral security arrangement, and there's talk of extending it to Egypt, with Turkey wanting in too. If they can bring Qatar in, there'll be more than enough coherence among these nations, backed by the military power of Egypt and Pakistan — Pakistan being a nuclear power in regional terms, a meaningful counterweight to Israel, which is also nuclear-armed. So expect a redrawing of regional alliances. These are very early days — I have no idea how it ends — but the US clearly has to rethink the consequences of its failure in this war.

Alec Hogg: Before we move off the US — what about the fact that its arsenal has been depleted? It's used so many missiles that some military analysts are saying this opens the way for China to move on Taiwan, since America no longer has as much left to defend Taiwan with. Do you think that's realistic — or could Taiwan have its own surprise for its big neighbour, given how badly the big powers have fared against smaller ones lately?

Iraj Abedian: There's no question the broader geopolitical chessboard includes China, Taiwan, Russia and Ukraine alongside all this. To the extent that the US military has shown it can't impose its will and get away with it, Trump's "Make America Great Again through power" approach has proven a complete miscalculation — misplaced in history. This isn't what the Portuguese or Spanish did 200 years ago; that model belongs to a different age, not the 21st century. Russia has learned its lesson too. China is the real winner here — it benefited from the Ukraine war, and now from the Iran war, and I think it will play an interesting game from here, scoring points off the United States. Once this settles, the mega geopolitical chessboard tilts toward China, and the US is in a weak position — not just because its arsenal will take years to replenish, but because even replenished stockpiles aren't as useful as Ukraine has shown against Russia. Russia has the biggest tools; Ukraine builds drones and wipes out targets at a fraction of the cost. Iran did the same — cheap, affordable missiles and drones used to attack American bases across the region, effectively. Yes, they needed to send large numbers, but only about 5% need to land to cause damage, and each Iranian drone costs a fraction of an American counter-missile. War is no longer about tanks and planes — it's far more complex in an age of interdependence and accessible technology.

Alec Hogg: As an outsider, it strikes me the mullahs must be feeling their oats right now — believing, almost like the Afrikaners in South Africa did for so long, that they're God's chosen people and that's why this far better-resourced "evil empire" hasn't prevailed and is, in fact, losing. What does that mean for the Iranian people and the country's future?

Iraj Abedian: It's a tragedy at the moment, but we have two defeated political groups here. The Iranian regime is no less defeated than the American one. Trump was selling the obsolete notion of nationalism and Making America Great; the Iranian regime has been selling the fetish of religious fundamentalism — also defeated. They may have beaten back American strategy, but they haven't won people's confidence — their legitimacy is at its weakest ever. Worse, factions within the regime are fighting each other more fiercely than they're fighting America. Following their daily exchanges, you'd think these factions were more hostile to each other than to Trump.

This comes back to my earlier point: the mullahs believed God was on their side, but they can't provide for their own people. Hospitals are short of critical medicine, food prices are up and availability is down. If God were truly on their side, four provinces — a stretch of over 2,000 kilometres to the Persian Gulf, the country's breadbasket and the source of much revenue, imports and exports — wouldn't be cut off from the mainland, with roads, communications and transport destroyed. The mullahs are feeling their own pain too, but they define success differently: success, for them, is simply still standing, no matter how many have died or how many millions will suffer and lose their futures — as long as they're still standing in front of "the Great Satan." But when people go to the shops and face triple-digit inflation, and don't know when they'll next find medicine, the story the regime used to sell no longer lands. Nobody's listening. So the regime has lost emotional allegiance even among its own ranks, never mind the wider population. We now have two defeated regimes whose strategies proved wildly out of step with the reality of their own people, the wider region, and humanity's broader interests.

Alec Hogg: So where does that leave South Africa? We have exposure to Iran through our government inviting it into BRICS, and through one of our biggest companies, MTN, which holds 49% of a major Iranian cellphone network. Where does that leave this country and its exposure?

Iraj Abedian: It's unfortunate — I've said this before — that South Africa bet on a partnership, at the wrong time and unnecessarily, that was bound to end up here. Instead of being an independent, impartial nation focused on our own developmental needs, we've landed in a camp that puts us in the bad books of the Americans, for good reason or bad. At the same time, Iran won't be in a position to look after its own needs for the next 30 years, never mind being a good partner to anyone else, given the scale of destruction. America may have lost this war strategically, but it hasn't failed militarily — it has damaged Iran badly, and reconstruction is likely a 20-to-30-year project.

South Africa ended up not on the side of the Iranian people, who are suffering under this regime regardless of whether America wins or loses — tens of thousands of political prisoners, daily executions, alongside food and medicine shortages. It's not a good look, and it's not compatible with South Africa's stated values or its economic interests over the medium term.

Alec Hogg: And your own family, people you know in Iran — how are they seeing the future?

Iraj Abedian: Connectivity has been restored, so we're in touch. They're suffering, like everyone else. My mother is a good example — bedridden, 85 years old, and struggling to find medicine. Prices have gone up five times since January, if you can even find what you need. Luckily she doesn't currently need medicines that aren't available. But from what I hear, it's a nation that's highly angry, highly depressed, disappointed, and feels deceived both by its own government and by the West's talk of human rights, which hasn't shown up in any meaningful way over the past nine months, or the past ten years.

Alec Hogg: How do they see the future?

Iraj Abedian: Uncertain. When I ask my family and friends, they say, "We've got used to living with this uncertainty." I ask how they'll manage, and they say they don't know either — they'll manage somehow. I'm not a psychologist, so I can't fully describe the state of a human being who has nothing but internal belief and strength while everything around them is destruction, joblessness and daily hardship, under a government that remains relentless in its suppression — daily hangings, making examples of men, women, young and old, poets and politicians, anyone suspected of sympathy toward the invasion or toward forces seen as destabilising the regime. They're killed or imprisoned, sometimes within hours of a verdict. I get updates almost daily: so-and-so had a verdict against them, then two days later, so-and-so was executed. That's the state of that society. I can hear it, but I honestly can't relate to it.

Alec Hogg: How do you think this ends, given Trump is under enormous pressure and doesn't want to be seen as a loser? He's said he won't put boots on the ground, yet most analysts say breaking the impasse and taking the Strait of Hormuz would need something like 600,000 troops. Do you see this becoming a Vietnam?

Iraj Abedian: It could be worse than Vietnam, because Vietnam didn't have global consequences for petrol prices, farming, food production and aviation. It was regionally confined. Iran's geography, and the modern economy's dependence on energy, fuel and fertiliser, makes this a different order of magnitude — not just for America and the Republicans, but for the global economy. The rest of the world can't just sit back and analyse. Europeans, for example, have largely abandoned the Iranian people and the wider region because they dislike Trump's attitude on Greenland and NATO — but they need to rethink that. Trump may be erratic, but what's happening affects their present and future too. Governments everywhere, including South Africa, have to recognise this as the first case of a truly global crisis illustrating the interdependence of nations. That's the one genuinely interesting outcome of this failure across the American, Russian and Iranian regimes — it shows we can't be bystanders analysing from a distance, because it will affect our tomorrow too. That's the futility of war in this age.

How it ends increasingly depends on those bystanders rethinking their own role, regardless of which side they favour. Sadly, humanity doesn't have a ready collective solution — it never has. Even the United Nations and the League of Nations were limited, largely solving problems between European and developed nations. This crisis has globalised the challenge: how do we avoid this kind of confrontation, which doesn't belong to this age, and how do we bring it to a close together? Left to Mr Trump alone, it's simple: escalate, escalate, cause more damage, and Iran's regime will do the same in return — more damage, more devastation, and more consequences for the rest of us.

Alec Hogg: Dr Iraj Abedian — economist, entrepreneur and academic, Iranian by birth, South African by adoption — will be at BNC#9 next month with more insights. Thank you, Iraj. You've opened my eyes today, and I'm sure the eyes of many members of the Business Tribe.

Iraj Abedian: My pleasure. Thank you.

Alec Hogg: I'm Alec Hogg, from BizNews.com.

Transcript lightly cleaned for ASR errors and readability. Content and meaning unchanged from the original recording.

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Pele Collins went from leading the SpaceX parachute engineering team that brought American astronauts safely home to co-founding a Y Combinator-backed deep tech startup, Beyond Reach Labs. In his latest interview with Irakli, the proudly South African engineer reveals how his team is tackling the ultimate pick-and-shovel play for the next era of the space race: deployable structures that unfold from the size of a dining table to a full-sized football field in orbit. Building in space historically meant assembling structures piece-by-piece over dozens of rocket launches. Collins wants to bypass those massive costs using dynamic, folding mechanisms. While the company initially entered Y Combinator focused on simulation software, raw customer feedback forced a fast pivot to pure hardware. “...customers said this, I mean this tool's amazing, we'd love to use it, but honestly, can you just go design and build the thing for us?” Collins recalls. Collins credits his resilient problem-solving mindset to his South African roots, highlighting a culture of mutual support that even landed him his first break at SpaceX under a fellow South African manager. “South Africans also always help each other out and... open doors for each other,” he says.

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Edited transcript of the Interview

Irakli Rekhviashvili (00:00:14:00 - 00:00:45:00)

Pele Collins grew up here in South Africa before heading to the University of Pennsylvania to study mechanical engineering, where he met his future co-founder and then went on to Space-x, where he spent seven years, eventually leading the parachute engineering that brought astronauts safely home. Today, he is the co-founder and CTO of Beyond Reach Labs, a Y Combinator backed startup building solar arrays that unfold from the size of a dining room table to the size of a football field in orbit.

Irakli Rekhviashvili (00:00:45:02 - 00:00:46:01)

Welcome, Pele

Pele Collins (00:00:46:03 - 00:00:47:16)

Thank you. Thank you for having me.

Irakli Rekhviashvili (00:00:47:16 - 00:00:53:18)

Take us back. Such an exciting journey. What made you walk away from that? To start beyond Reach Labs.

Pele Collins (00:00:54:00 - 00:01:14:11)

Great question. I think I started at spacex. I went in with a particular mission in my mind when I was working on the, the Dragon program at the time, astronauts were our only flying to space, on Russian spacecraft. America. Since the shuttle had retired, had essentially lost the ability to fly astronauts to and from space.

Pele Collins (00:01:14:13 - 00:01:38:09)

It was pretty sad, honestly. And I had this mission to sort of do whatever I could to help bring, as you say, human spaceflight back to back to America. And so played my part. But the parachutes developed that vehicle and sort of felt like a real sense of achievement. After sort of bringing back astronauts, finally, we had the first ocean splashdown since the Apollo missions, which is pretty cool on our parachutes.

Pele Collins (00:01:38:11 - 00:01:59:14)

And I think I had achieved a lot there, and I learned a lot of things I wanted to learn about sort of engineering, particularly like aerospace engineering. How do you how do you go from a concept to a space qualified piece of hardware? And then I wanted to do my own thing. And, I have a lot of my great friends from from undergrad, Mitch Fogelson, had this idea for a company.

Pele Collins (00:01:59:16 - 00:02:14:00)

Came to me and we started talking about it more and more excited, and I thought, why not give it a shot? You'd only get opportunities like this probably a few times in your life to try and do your own thing. And yeah, that's kind of why I took the leap, I guess.

Irakli Rekhviashvili (00:02:14:02 - 00:02:24:08)

And what's interesting is both of your technical co-founders in your journey with Y Combinator, you, in fact, started as a software company. Can you walk us through how you how you transitioned?

Pele Collins (00:02:24:10 - 00:02:49:05)

So, yeah, like you said, we're Botelho co-founders. We actually studied mechanical engineering together. I co-found on, Mitch got a PhD from Carnegie Mellon. So he's definitely about as technical as a technical co-founder can get. I think we balance each other's skillset pretty well. I think, Mitch, sort of coming from the PhD is like, theoretically, and like from a theoretic standpoint, and it's always like thinking of, like new designs and everything else.

Pele Collins (00:02:49:07 - 00:03:12:21)

And I have this sort of real world, I guess, industry knowledge from my time and space on how to sort of take ideas and turn them into sort of, like I said, real space flight hardware. And I also and what helps us again, we've known each other for so long and we did our degrees together. So we spent I like to say I mean, I met my, my wife in in college, but I spent more time with Mitch than I spent with her because we it was in classes every day.

Pele Collins (00:03:12:21 - 00:03:37:13)

It was doing problem sets every day. So we got into this knowing that we worked super well together. I think that's also a rare thing. And so we know skills are complementary. So, we knew when to do a company. As you mentioned, we actually did apply to Y Combinator more as a software company. Our focus got into Y Combinator, and this isn't necessarily a secret, but we one of the hardest sort of technical challenges.

Pele Collins (00:03:37:15 - 00:03:57:05)

We started thinking about, like, big things in space. How do you how do you get big structures in space? And you think of, like the ES International Space Station. The way that was assembled, that's the again, the biggest thing we have in space right now was piece by piece. So we'd send up a piece on a rocket, sort of another piece, assemble those together, eventually get enough Lego pieces.

Pele Collins (00:03:57:05 - 00:04:16:12)

You get a big structure at space, which is amazing that the ISIS is incredible, but it took something like 80 rocket launches and hundreds of billions of dollars to do it that way. So if you want to build big things in space, there's got to be a smarter way to do it. I mean, look at something like the James Webb Telescope, which was awesome because that was sent up on a single rocket launch.

Pele Collins (00:04:16:16 - 00:04:36:21)

It was this incredible structure that basically did this like amazing, like unfolding origami style deployment where fold it up for launch to get small enough. And then when I got to space, basically expanded and got big. So the I think the the idea and like this what we call deployable is just sort of mechanisms, things that move in space.

Pele Collins (00:04:36:23 - 00:05:01:01)

That basically lets you that's the key enabler to let you build big things while keeping costs down, because you're launching way fewer times the big technical challenges, something like that. And James Webb had something like 100 different, like single point of failure is analyzing things that move a lot harder than analyzing sort of static structures. And there are a lot of good software tools out there for static structures and something that just sort of playing around with.

Pele Collins (00:05:01:03 - 00:05:31:14)

James Webb was building better tools for analyzing dynamic systems, which there's been a lot of development in the last couple of years. If you think of like, robotics, the push there, those are all basically moving mechanisms. How do you analyze how they basically act in the real world versus just in simulation? And so when we applied toY Combinator, the idea was actually we build develop some of those tools to enable people to basically come up with and build these, these cool mechanisms in space by using that analysis sort of simulation tools.

Pele Collins (00:05:31:16 - 00:05:46:21)

But something a Y Combinator really pushes you to do is go out and talk to customers as opposed, just like, keep that idea to yourself, go out and speak to people. Make sure you're building something people actually want need. And what we found when we sort of did that is a lot of customers said this. I mean, this tool is amazing.

Pele Collins (00:05:46:21 - 00:06:05:21)

We'd love to use it. But honestly, can you just go design and build the thing for us? And that for us was great because ultimately we're for being honest. I even was like, we're hardware people more than software people. Like we know to do software. I mean, especially honestly with like with today's like AI tools, most people can do basic software, which is pretty exciting time.

Pele Collins (00:06:06:01 - 00:06:32:16)

But ultimately, like what excites us is actually building physical stuff that we can hold in our hands that we can point to and say, look, I caught this thing. That's that's why we did mechanical engineering. And so I think it was a it was a great, sort of small like, reframing of the problem in our minds of, hey, we still get to have these use these cool tools that we built, or we'll just use them internally and we'll use them to help us design, analyze, and build these awesome structures in space.

Irakli Rekhviashvili (00:06:32:17 - 00:07:01:17)

Fascinating. I think your co-founder mentions that as like, The Home Depot of space where you have these deployable is a big part of that is this expansion factor. And and this talk around how challenging it is getting products into space and such a limited, limited container talk through the origami effect and how your patented product provides rigidity as it expands, as opposed to flimsiness, which is what we currently see in the market.

Pele Collins (00:07:01:20 - 00:07:22:11)

Yeah, absolutely. So I think, the from like a, I guess more technical standpoint, right. You can always make a big structure and think of like, like a sheet for like a bed, right. Like our tablecloth, like that is a big structure. Or honestly, a good example is a parachute, right. That's a big, that's a big structure, but it's it has no rigidity.

Pele Collins (00:07:22:13 - 00:07:42:03)

And so there's, there's always this balance of as you get bigger and bigger and also think of as like a bridge as well. Like as a bridge gets bigger, bigger. I think we can all inherently understand that it's going to get more flimsy. It's like a ruler that you hold on. But we we want bigger things. They have to be stiff and strong, like, you know, when you're building, falling away, you want your building to like, stay up straight.

Pele Collins (00:07:42:05 - 00:08:05:03)

And so there's that's where the technical challenge part is. And so we always talk about like stiffness. And we want like a big stiff structure. And this is inherently the challenge. So how do you get a big stiff structure that can fold down and be super compact. And that's where like you said, a lot of the patterns we've developed is, is really thinking through and focusing on that specific problem.

Pele Collins (00:08:05:05 - 00:08:28:18)

If you think of big stiff structures in general, like if you think of like a bridge example, it's it's very efficient how people use think struts, cables, all these, these, these structures, combining them in a way to make an overall very stiff, structure. And so we're thinking about how do you take those. We want the, we have the end state that we want to have and we have the starting volume.

Pele Collins (00:08:28:18 - 00:08:41:04)

And how do you do that? Transformation, I think, requires a lot of, this is where the new developments on the technical challenges and that's like, that's the problem that we're, we're solving, with a lot of our designs right now, which is pretty exciting.

Irakli Rekhviashvili (00:08:41:06 - 00:09:06:00)

A real bottleneck. I see you're wearing the South African jersey, really, really proud. And, and and just for for the South Africans here looking and watching. What message do you have, especially to to the youngsters who look up at the sky and think, you know, I'm also interested in getting involved in something like this. Youth.

Irakli Rekhviashvili (00:09:06:02 - 00:09:10:12)

You grew up here and now you on the other side. What advice would you would you give to them?

Pele Collins (00:09:10:17 - 00:09:34:19)

But I think that there are amazing opportunities within South Africa and outside of South Africa. I saw an opportunity myself to go to school in the United States, which definitely opened up doors for me that I've been trying to find my whole life and trying to follow through those doors. I think what I've realized was coming from South Africa to America as well, is that it gives you a good foundation.

Pele Collins (00:09:34:19 - 00:09:55:06)

So I think it gives you a good way of thinking, thinking through problems. And honestly, how Africans see the world gives us a good perspective, I think, in the humanity for sure. Like I think, I do miss like the general friendliness of South Africans, especially American people are the most friendly. But I think there's this like sense of humanity that also Africans have.

Pele Collins (00:09:55:06 - 00:10:20:09)

And so even though I've been yeah, I've been trying to think about solving real world problems. And you realize that Africans do have the capability. I think it's just a question of opportunities. So if you if you have new opportunities, make sure to take them. Honestly, I like a pretty as a at like story here. The first person who did my like interview when I was applying for a job at Space-x was also another South Africa.

Pele Collins (00:10:20:09 - 00:10:35:12)

And this guy Daniel from and I think he, he probably looked at me as like a South African. And he was like, I'm going to give this guy a shot, you know? And I think that was like the opportunity that I needed. So and also always help each other out and, like, open each other, open doors for each other.

Pele Collins (00:10:35:18 - 00:10:45:18)

I guess that's my piece of advice, like, seek out opportunities, take them whenever you're. You have them. I've been very blessed. My family has, I believe I think in these opportunities. First time I must.

Irakli Rekhviashvili (00:10:45:18 - 00:10:52:19)

A wonderful message. Pele Collins from Johannesburg to the launch pad. Thank you for joining us directly.

By Loni Prinsloo

South Africa’s deputy finance minister said he’ll submit a formal response defending his position as chairman of the Public Investment Corp. when its board meets next week to discuss recent turmoil at the state pension-fund manager.

Finance Minister Enoch Godongwana has called a meeting for July 27 at which the PIC’s non-executive directors and his deputy, David Masondo, face a shareholder vote for removal, News24 reported on Tuesday. The PIC is 100% state-owned and Godongwana acts as the government’s shareholder representative.

“I will make my full representations, as requested by the minister at the shareholder’s general meeting,” Masondo said in an emailed response to questions from Bloomberg.

The PIC is Africa’s biggest money manager, with about 3.6 trillion rand ($219 billion) under management. It’s been rocked by upheaval over the past week after Masondo suspended Chief Executive Officer Patrick Dlamini amid a probe into allegations of impropriety raised in a whistleblower report. The nation’s financial regulator has announced an investigation into governance at the fund.

At least six non-executive directors of the PIC’s 11-member board have resigned in the past week, including four who quit on Tuesday, Johannesburg-based news website Currency reported. 

Godongwana and Masondo — the top two officials in the finance ministry — have been at odds over the decision to suspend Dlamini, the handling of a report that he ordered into a controversial investment in a Johannesburg airport, and a whistleblower tip-off that followed.

Dlamini was suspended eight months after ordering an investigation by PwC into a Black economic-empowerment deal linked to an investment in Lanseria, an airport on the northern outskirts of Johannesburg. The report exposed alleged wrongdoing by members of the PIC’s staff, the people said.

The removal of Masondo from the post of chairman would be unprecedented in the history of the PIC, News 24 said. South African law requires the board be chaired by a deputy minister within the so-called economic cluster of ministries, which include finance, trade and mineral resources.

© 2026 Bloomberg L.P.

For many South Africans living in the UK, the decision to return home is driven by family, lifestyle, cost of living, weather, children or retirement planning. But while the personal reasons may be straightforward, the tax and investment consequences can be costly if handled incorrectly.

We are seeing a growing number of South Africans planning a move back from the UK, with tax residency, UK pensions, ISAs, rental income and offshore investments among the most common areas where mistakes occur.

South Africa operates a residence-based tax system. Once you are South African tax resident, SARS can tax your worldwide income and capital gains, not only income earned locally. Non-residents, by contrast, are generally taxed only on South African-sourced income.

Why tax residency is the first question to answer

Before reviewing investments, property, pensions or tax returns, you first need to determine your tax residency status.

SARS assesses individual tax residency using two main tests: the ordinarily resident test and the physical presence test. The ordinarily resident test considers whether South Africa is your real or usual home - the place to which you would naturally return. The physical presence test looks at the number of days spent in South Africa over the relevant tax years.

For returning South Africans, the ordinary residence test is often the most relevant. If you return with the intention of making South Africa your permanent or main home again, you may become South African tax resident from the date of return, even before the physical presence day-count test becomes relevant.

Mistake 1: Assuming UK income is only taxable in the UK

A common and costly misconception is that UK income is only taxable in the UK.

If you are South African tax resident and continue to receive UK rental income, UK employment income, dividends, interest or pension income, that income may need to be declared in South Africa.

The UK–SA Double Taxation Agreement helps determine which country has primary taxing rights and how double taxation relief applies. However, a DTA does not usually mean the income can simply be ignored in South Africa.

Mistake 2: Thinking “double tax agreement” means “no tax”

Double tax agreements are often misunderstood and incorrectly applied. Their purpose is to prevent the same income from being taxed twice without relief, not to make foreign income tax-free.

Where a double tax agreement applies, the first step is to consider the specific treaty article relevant to that income, for example, employment income, rental income, pensions, dividends or interest. The agreement will determine whether the income is taxable in one country only, or whether one country has primary taxing rights while the other must provide relief.

For returning South Africans, this means UK income may still need to be disclosed to SARS, even where the UK has already taxed it. 

The correct treatment involves applying the UK–South Africa agreement to determine taxing rights and whether any South African tax remains payable. In some cases, there may be no additional South African tax due, but that does not remove the reporting obligation.

Mistake 3: Keeping a UK ISA without understanding the South African tax treatment

UK Individual Savings Accounts are tax-efficient in the UK, but they do not retain the same status once you are South African tax resident.

Many returning South Africans assume that because an ISA is tax-free in the UK, it is tax-free everywhere. South African tax rules do not treat UK ISAs as tax-free accounts in the same way. Income and capital gains within the ISA may therefore need to be reported to SARS after residency resumes.

This does not automatically mean an ISA must be encashed before returning to South Africa, but it should be reviewed from a South African tax, investment and reporting perspective to avoid unexpected tax exposure.

Mistake 4: Not obtaining valuations for offshore assets on return

Capital Gains Tax (CGT) planning is one of the most important and often overlooked areas for returning expats.

When you resume South African tax residency, your offshore assets are generally rebased for South African CGT purposes. In simple terms, the market value of the asset on the date you become South African tax resident again becomes the base cost for future CGT calculations.

The costly mistake many people make is failing to obtain proper valuations at the time of return. Years later, when the property or investment is sold, it can be difficult to prove the correct base cost to SARS, potentially increasing your tax liability.

Mistake 5: Failing to report offshore investment income

Another common mistake is assuming that income left offshore does not need to be reported in South Africa.

If you are South African tax resident, foreign dividends, offshore interest, foreign rental income and other offshore investment income may need to be declared in your South African tax return, even if the money is not remitted to South Africa.

This is particularly relevant where clients retain UK platforms, UK bank accounts, ISAs, General Investment Accounts, offshore bonds, foreign shares or foreign discretionary portfolios after moving back to South Africa.

Mistake 6: Not understanding how UK pensions are taxed

UK pensions require careful review to avoid unintended tax consequences before returning to South Africa.

South Africans returning home do not necessarily need to cash out UK pensions when leaving the UK, although some providers may restrict access or functionality for non-UK residents.

The UK–SA treaty treatment of pensions can depend on the pension type. HMRC guidance states that pensions, except government pensions, and annuities paid to a resident of either South Africa or the UK are generally taxable only in that country of residence under Article 17.

The key mistake is making pension decisions such as lump-sum withdrawals, drawdown or transfers without first understanding both the UK and South African tax consequences.

Mistake 7: Forgetting about UK rental property reporting

Many returning South Africans keep a UK property as an investment. This can be sensible, but it adds ongoing tax and reporting complexity.

UK rental income generally remains taxable in the UK, but if you are South African tax resident, it may also need to be declared to SARS, with relief claimed for UK tax paid where applicable.

The UK property may also create a future CGT event. The combination of UK tax, South African tax, exchange rates, base cost calculations, foreign tax credits and reporting obligations means UK rental property should be reviewed before return, not only when it is eventually sold.

Practical steps before returning to South Africa

Taking these steps before you return can help you avoid delays, penalties and unnecessary tax exposure:

• Confirm when you are likely to become South African tax resident again

• Review whether you will remain UK tax resident for part of the year

• Map your income sources, including salary, rental income, dividends, interest, pensions and investment withdrawals

• Obtain valuations for offshore assets, including UK property and investment portfolios

• Review UK ISAs and other UK tax-efficient investments

• Consider whether UK pensions should remain in place, be accessed, or restructured

• Check whether foreign tax credits will be available for UK tax already paid

• Keep clear records of offshore capital, income, acquisition costs and valuations

• Coordinate UK and South African tax filings to avoid inconsistent reporting

What to do next

Returning to South Africa can be an excellent lifestyle and financial decision, particularly for those coming back from the UK with international savings, pensions and investments. But without proper planning, it can lead to unexpected tax exposure, reporting issues and missed opportunities.

The most common mistakes come from misunderstanding tax residency, assuming UK tax treatment applies in South Africa, failing to report offshore income, and not obtaining valuations for offshore assets at the right time.

With the right financial planning advice, many of these risks can be managed efficiently. The key is to review your tax position before you move, not after SARS asks questions.

If you are planning a return to South Africa, Sable International’s cross-border experts are hosting exclusive in-person or virtual consultations for expats looking to move back home. We can help you with everything from wealth to tax to foreign exchange transfers to ensure a smooth financial transition.

The complimentary sessions will take place in London, Cape Town, or online between 7 and 11 September 2026. Reserve your spot here.

By Ilan Preskovsky

One of the great challenges of talking about Israel, Gaza, the West Bank, Iran, Qatar, and any other Middle Eastern country caught up in the ongoing conflict is that it is extremely difficult to break through the mountains of disinformation under which the actual truth is buried. And for all the talk of Israeli “propaganda”,  even the most meticulous, evidence-based basic truths released by Israel or her supporters are overwhelmed, almost instantly, by a much better funded and much, much better organised anti-Israel (and more often than not, anti-Western or anti-liberal-democratic) apparatus.

The simple truth is that while the Israeli government is absolutely, unforgivably terrible at explaining itself, anti-Israel forces - especially those based in Qatar and Iran - have been exceptionally good at framing every Israeli action, no matter how justified, as a crime against humanity, and every action by Hamas, Hezbollah, the Houthis, and the Islamic Republic of Iran, no matter how horrific, as “justified resistance”. And it’s been even better at making sure that its disinformation is spread as widely as possible and through as many “respectable” agents as possible.

From Qatar spending billions of dollars on Western universities (to the point, in fact, that the UAE has been clamping down on bursaries for Emirati kids to go study in the UK in fear that they’ll come back radicalised!), to the United Nations’ undeniable bias against Israel and its capture by anti-liberal-democratic countries, to the ANC’s baseless case of genocide at the International Court of Justice, the propaganda war against Israel is as intense as it is multi-faceted.

There is one arena in the information war, though, where the influence of anti-Israel propaganda is both vastly under-reported and especially damaging. It’s one of the most visited websites in existence. It usually comes up as the top result in most web searches and is also the basis for the short synopsis that accompanies those results. And in our AI-obsessed times, is also one of the primary sources that most Large Language Models (LLMs) like ChatGPT and Gemini draw on for information.

I’m talking, very sadly, about Wikipedia.

And though my focus is on one particular subject, about which I actually know a fair amount, it represents a much broader problem with not just Wikipedia but information, in general.

Dangerous Definitions

This is the opening paragraph of Wikipedia’s entry on Zionism:

“Zionism is an ethnocultural nationalist movement that emerged in late 19th-century Europe to establish and support a Jewish homeland through colonisation in the region of Palestine, which roughly corresponds to the Land of Israel in Judaism—itself central to Jewish history. Zionists wanted to create a Jewish state in Palestine with as much land, as many Jews, and as few Palestinian Arabs as possible.”

This is, it’s true, the definition of Zionism that anti-Zionists use and no doubt most Palestinians view it this way too. It is not, however, a definition of Zionism that the overwhelming majority of Jews and Zionists come remotely close to recognising.

To the vast, vast, vast majority of Zionists across the political spectrum, Zionism refers, very simply to the belief that Jews have the right to self-determination in their historic homeland. That’s it. It most certainly define itself according to having “as much land, as many Jews, and as few Palestinian Arabs as possible”.  

The first point, especially, isn’t borne out by history when Zionist and Israeli leaders have consistently agreed to territorial compromises for the sake of their own sovereignty. It was Zionists, after all, who accepted partition in 1947 and the Arab League who outright rejected it. It was successive Israeli governments that surrendered substantial pieces of land for peace with Egypt and Jordan, not the Palestinians. And it was a right-wing Israeli Prime Minister who unilaterally withdrew all Jews from Gaza, only to be repaid with nearly two decades of constant attacks from Hamas, culminating with its invasion of southern Israel on 7 October 2023.

It’s true, like every other nation on Earth with a cultural identity, in order for Jews to have self-determination, they do need to make up the majority population of their own state. It’s an unspoken truth on which all countries exist – especially ethnostates, which comprise the vast majority of countries in the world, but even in an ethnic melting pot like the USA – and yet only Israel is singled out for, in effect, being a nation with borders and a particular cultural identity. Certainly none of the many ethnostates with far greater restrictions on citizenship than Israel are defined in such incendiary terms. Nor are any other national movements, including, obviously, that of the Palestinians. 

The most galling part of this twisted definition of Zionism, though, is the insistence that it’s a colonial movement. These Zionist so-called “settlers” didn’t come to the land as leaders of a vast conquering empire, but as refugees – first from pogroms and the Holocaust in Europe, and then from the many Middle Eastern countries that Jews called home for millennia, but were expelled or driven out from in the wake of the establishment of Israel. What kind of twisted take on colonialism do you need to reframe refugees with indigenous ties to a land as colonisers?

And though there is a tad more nuance to be found elsewhere in the lengthy entry on Zionism, it is this opening paragraph that is most frequently quoted in search results and often forms the entire basis of a more casual reader’s understanding of a the topic. The ideological manipulation hardly stops there, though.

The entry on Zionism, for example, never mentions that the name “Palestine” comes from the term Syria Palaestina, which the Romans applied to the region in order to separate the land (Judea) from its people (Judeans, later Jews). “Palaestina”, incidentally, didn’t refer to the non-Jewish natives of the land either, but to the Philistines, a Greek sect that attempted to colonise the area years before.

Most egregious, though, are the attempts - as in the section on “national self-determination” - to rewrite the Jewish people as simple co-religionists and not a nation (despite the ancient Hebrew term most used to describe Jews, am yisrael, being a designation of peoplehood, not religion), while also minimising the centrality of the land of Israel to Jewish belief and culture. 

Goodbye Objectivity

And yet, my primary objection here is not, in fact, that the Wikipedia page on Zionism includes things with which I even very strongly disagree, but that it de-emphasises, omits, or misrepresents vital information and viewpoints that don’t fit into a specific, highly subjective ideological narrative. Though, yes, it is especially galling that it’s the “lived experience” of actual Zionists, actual Jews, actual Israelis that is being most pointedly denied.

Even worse is the Wikipedia page on “the Gaza genocide”, which presents this so-called “genocide” as absolute, irrefutable fact, and all but entirely negates the many, many arguments against such a claim – one that has, as it so happens, never been proven in any international court of law.

But it doesn’t stop there. Investigative journalist, Ashley Rindsberg – who has really been at the forefront of exposing these deep-rooted institutional biases within Wikipedia – notes this ideological capture across multiple pages that deal with Jews, Israel and Zionism, and also on pages dealing with the likes of Hamas and the Islamic Republic of Iran. The results are stark: a softening or erasure of the many evils of radical Islamism and Jihadism and a wholesale vilification of Jews and Israel.

How It Works

That Wikipedia is not a perfect source of information isn’t exactly news, of course. Its “democratic” nature, where anyone can edit it as long as they provide some sort of “reliable source” for their claims, means that it has always had a certain level of unreliability. It’s why it’s generally not considered a valid primary source in schools and universities. And yet, because most entries reference numerous sources and because it uses a consensus approach to information, it has become increasingly seen as pretty unimpeachable. A few mistakes here and there, sure, but on the whole, very reliable.

Without getting into the complicated system that Wikipedia uses to edit, maintain and monitor its millions of pages – again, Rindsberg lays it out far better than I could, though it would require a whole article in itself anyway – these two assumptions of reliability are actually exactly why the platform is so vulnerable to exploitation.

First, there’s the matter of “reliable” sources. When news sources, humanitarian organisations, NGOs, and governments are as captured by ideology as almost all are today, even the most “trusted” of sources, be it the UN, the New York Times, Harvard, or the Wall Street Journal, can’t be relied upon for anything remotely resembling objective truth. And this is to say nothing of the countless less trustworthy sources out there.

This becomes all the more true when dealing with subjects that are already politically charged, and when it comes to something as fiercely debated as the Israel-Palestinian conflict, it’s all too easy to build entirely conflicting realities, each fully backed up by hundreds of “reliable sources”.

As for what we can call objectivity through consensus, it only works if the subject in question is fairly straightforward, already understood by large swathes of people, and isn’t vulnerable to ideological manipulation. It’s not hard to think of examples where thousands of people are wrong and only one or two are right. We have experts for a reason, after all.

Much more problematic, though, than ignorance or mistaken error is wilful manipulation. And the Wikipedia entries relating to Jews, Judaism, Zionism and Israel are just the most acute examples of this. Rindsberg, in his investigations, uncovered some forty editors who are dedicated purely to pushing a specific anti-Israel, frequently pro-Islamist agendas on Wikipedia. These editors have a lethal combination of resources, time, and know-how to exploit the very mechanics of Wikipedia and have proven so effective at this manipulation that they managed not only to prevent others from editing the content, but managed to get Larry Sanger, one of the platform’s founders, banned for trying to provide greater ideological balance to pages related to Zionism and Israel. 

How It Affects You

As is so often the case, though, prejudice against Jews is not really about Jews. At least, it never stops with the Jews. I don’t care whether you’re left-wing, right-wing or centrist. Liberal or conservative. Pro-Israel, pro-Palestine, or anything in between. Anyone who cares at all about historical accuracy, truth, balance, and objectivity, should care that the largest and most accessible repository of information in the world has been so thoroughly ideologically captured.

The ideological bias on Wikipedia is, according to Rindsberg, overwhelmingly leftist, but the issue here is less about the specific bias than the fact that there’s such a heavy bias at all. It would be no less alarming if Wikipedia was ideologically captured by the right.

But, of course, we’re not even allowed to divorce the matter from partisanship even just in talking about it. Because this particular bias is left-leaning, there is an unwritten but unbreakable rule that it can only be discussed on primarily right-wing (and/ or Jewish) platforms. Readers of the New York Post are presumably familiar with this story; readers of the New York Times presumably aren’t. 

But then, what else can be expected in an age where blind adherence to ideology trumps reality at every turn? The genuine pursuit of truth simply never stood a chance.    

By Edward Luce

The west’s political crisis can be shrunk to one word — mistrust. Voters feel cynicism, prejudice and anger about their systems. But each is downstream of loss of trust. Less urgency is felt about the rest of the world’s plummeting faith in America. That China is now trusted more than the US in a large majority of countries surveyed by Pew should ring alarms. Yet America still acts as if it were the most admired place on earth.

Not all of the decline is because of Donald Trump. The US has not only been going down; China has been going up. America’s recent reputational slide began in 2023 when Joe Biden was president. This coincides with his support for Israel’s devastating response to the October 7 Hamas massacre. The US foreign policy establishment pays little heed to the effect of Israel’s militarism on the world’s view of America, including in the rest of the west. But Israel is not the chief source of US unpopularity.

The comforting view, which is also the view of the comfortable, is that the world detests Trump’s values. That suggests that when a more admirable president is elected, America’s standing will improve. This modestly reassuring take leaves out one big thing. Not everything is about values. A majority of countries rank the US higher than China when it comes to freedom, yet nevertheless distrust it more. Mistrust is thus a synonym for incompetence.

Even in Trump’s America, the world knows that people are far freer than they are in China to express their views and practise their faith. But are Americans governed more competently? Is America more stable than China? It is hard to say yes to either. Take Trump’s on-again off-again Operation Epic Fury against Iran. In addition to being America’s most unpopular war at home since polling began — more so than Iraq and Vietnam in spite of far lower US casualties — it has alienated all of America’s friends and allies, including other western populists. They are now being insulted for not joining what many see as America’s most careless war of choice to date.

Gulf war III has also exposed the yawning gap between China’s approach to energy and America’s. China’s big investments in all forms of power, from renewables to coal, contrast with America’s slant towards fossil fuels. This is all on Trump. Not only has he scrapped Biden’s incentives for green energy, he is paying companies to walk away from alternative energy projects. Were it not for China’s big stockpile, global oil prices would have gone much higher in the past few months. Instead of claiming that China helped rig America’s 2020 election, Trump might thank it for saving US consumers from paying $6 a gallon at the pump.

Epic Fury coincides with unignorable signs of global warming, especially in the north. Countries like India and Iran have become used to large spikes in summer mortality. Only now is Europe ruing the absence of air conditioning after its hottest June on record. Global warming is shifting from elite preoccupation to mass consciousness.

The US is behaving as the baddie on this, doubling down on 20th-century habits. China, on the other hand, is perceived in the global south as the bearer of solutions. Even where the US is cutting edge, such as with Elon Musk’s Tesla, its reputation is atrocious. Few could forget the recent activist advert in London that showed Musk’s Cybertruck, or “Swasticar”. On it were the words: “Goes from 0 to 1939 in 3 seconds.”

Trust can vanish quickly but take ages to rebuild. Four of the six countries that still approve more of America are in China’s neighbourhood — Japan, South Korea, India and the Philippines. But the countries that distrust the US more are near and far, not just its insecure neighbours, Canada and Mexico. This is in spite of the fact that China’s export machine threatens to eat everyone’s lunch. The outliers are Poland, chiefly because Russia is next door, and Israel. Even Australia and the UK trust China more than America.

Trump’s exit would surely help. America’s global standing rose sharply from George W Bush to Barack Obama. But Obama did not recapture the reputational heights America had enjoyed in the 1990s. It will be even harder for Trump’s successor to set the clock back to Obama’s era. US-China competition is increasingly dominated by AI. China’s models are mostly cheap and open source, even if their capabilities are often lower. America’s are pricey and closed. For the first time in generations, US technology is not assured of domination. It cannot even bank on admiration. 

© 2026 The Financial Times Ltd. All rights reserved.

By Bloomberg News

Donald Trump’s war against Iran may be over, but the repercussions for global monetary policy are here to stay.

With a shaky ceasefire largely holding following the US president’s onslaught in the Middle East, the path for central bank interest rates around the world has now shifted higher for years to come, according to Bloomberg Economics. 

Its forecasts for borrowing costs, compiled here, show trajectories elevated by as much as half a percentage point or more through 2028 compared with those envisaged before the war. That’s both on BE’s global gauge for rates, and its measure for advanced economies. 

That outlook reflects evolving inflation risks, including those that might arise from the race to adopt artificial intelligence, which may yet subside. Even so, price momentum is still lingering from the energy shock caused by the closure of the Strait of Hormuz. 

With the dust settling from the conflict, BE’s forecasts showcase how the immediate cost-of-living impact on consumers and businesses will now be compounded by a period of more expensive loans and mortgages than might otherwise have been the case.  

Earlier this year, BE predicted the Federal Reserve’s rate would end up a percentage point lower by the middle of 2027, instead of the single quarter-point reduction currently envisaged. The European Central Bank is anticipated to hike again to a level half a point higher than originally envisaged, before then easing in due course. 

What Bloomberg Economics Says...

“Burned by the post-pandemic inflation experience, central banks have generally talked tough on inflation. With price gains surging higher, if only briefly, willingness to walk back that hawkish rhetoric looks limited — our central bank speak indicators have generally stayed in hawkish territory even as oil prices have receded.” —Jamie Rush, director of global economics.

BE’s outlook also suggests that the global economy is proving able to withstand more elevated borrowing costs, pointing to its capacity to weather repeated shocks. 

But given Trump’s appetite for disruption, with the war having followed last year’s campaign to raise US tariffs, that resilience will surely be tested again before long. 

With that caveat in mind, here is the quarterly guide by Bloomberg Economics to the monetary policy of 23 central banks, accounting for a combined 90% of the global economy.

GROUP OF SEVEN

US Federal Reserve

• Current federal funds rate (upper bound): 3.75%

• Bloomberg Economics forecast for end of 2026: 3.75%

• Bloomberg Economics forecast for end of 2027: 3.5%

• Market pricing: Traders are betting on one full quarter-point hike with a 20% chance of second by year end.

The Kevin Warsh era is under way at the Fed, and it’s likely to bring a slew of changes.

Already, investors have dialed up expectations for rate hikes this year, after the new chairman emphasized the US central bank’s commitment to fighting inflation during his first press conference in June. About half of Fed policymakers expect at least one increase this year, according to their most recent projections.

Warsh is also advancing a new communications strategy, including cutting forward guidance, meaning investors will have fewer signals about where policy is headed. It’s a potential sea change that carries both opportunities and risks, long-time watchers say.

How the Fed manages its rate policy in the coming months could have big implications for the November US midterm elections. Inflation and affordability are priorities for many Americans, especially after the Iran war drove up energy and other prices. Trump has continued to call for lower rates, but it remains to be seen whether his hand-picked Fed leader gets the economic conditions to deliver them.

The Fed will hold its annual Jackson Hole symposium in late August. Fed chairs have often used this forum to deliver big news, and Fed watchers will be keen to see if Warsh, who has promised “regime change” at the central bank and is assembling several task forces to scrutinize how it conducts monetary policy, will do the same.

What Bloomberg Economics Says:

“The Fed is likely to stay on hold for the remainder of 2026 as consideration of reforms by Warsh’s task forces provide a rationale for the increasingly hawkish committee to stay in wait-and-see mode. BE expects the Fed to resume cutting rates in the first half of 2027 as inflation subsidies and the productivity gains from AI become more apparent.”—Andrew Sacher

European Central Bank

• Current deposit rate: 2.25%

• Bloomberg Economics forecast for end of 2026: 2.5%

• Bloomberg Economics forecast for end of 2027: 2%

• Market pricing: Swaps imply around an 80% chance of a 25-basis-point increase by year-end and price a full hike by early next year.

Progress toward peace in the Middle East has granted the ECB time to assess its June decision to raise rates for the first time since 2023. US-Iran talks have triggered a steep pullback in oil prices that’s fed through to inflation, including underlying price pressures and the closely tracked services gauge. Some policymakers are now wavering on whether further action is needed, sowing doubt among investors that another hike will materialize this year.

Other officials, though, are wary to sound the all-clear, warning that the initial surge in energy costs is still working its way through the economy and could prompt workers in the region to demand higher pay as food and services inflation quicken with a lag. September’s meeting, with new economic projections, could be when differences of opinion spill over.

What Bloomberg Economics Says:

“The tone of Lagarde’s recent speeches suggests she still supports a rate increase in September, and we continue to expect a 25-basis-point rise. However, the drop in oil prices since the announcement of a deal between the US and Iran as well as the deceleration of euro-area inflation in June weaken the case for that additional hike. It would in all likelihood mark the end of this short tightening cycle.”—David Powell

Bank of Japan

• Target rate (upper bound): 1%

• Bloomberg Economics forecast for end of 2026: 1.25%

• Bloomberg Economics forecast for end of 2027: 1.5%

• Market pricing: Money markets are wagering on 22 basis points of hikes by year end which implies around a 90% chance of an increase.

The Bank of Japan will need to weigh if it should raise rates sooner than its roughly six-month pace in coming months as upside inflation risks continue to build.

Governor Kazuo Ueda lifted borrowing costs just last month, but expectations are already mounting for faster action, with some flagging the risk of a move in September.

The yen has fallen to its weakest level against the dollar since 1986, raising concerns that higher import costs will fuel inflation. The BOJ already expects price growth to stay above its 2% target over coming years.

Prime Minister Sanae Takaichi will also be a key factor. While she has consistently signaled support for easy monetary policy, her dovish stance has contributed to yen weakness, potentially increasing the pressure on the BOJ to normalize earlier than she would prefer.

What Bloomberg Economics Says:

“Some market participants think the yen’s slide could push the BOJ toward a hawkish turn and bring its next rate hike forward, perhaps to October. We disagree. The BOJ is guided by its inflation outlook, and lower oil prices reduce the need for a quick move. A pro-stimulus Takaichi administration is also likely to keep pressing for a slower pace of normalization. We expect the BOJ to raise the policy rate to 1.25% in December.”—Taro Kimura

Bank of England

• Current bank rate: 3.75%

• Bloomberg Economics forecast for end of 2026: 3.75%

• Bloomberg Economics forecast for end of 2027: 3.5%

• Market pricing: Traders assign a 75% probability of a quarter-point hike this year and expect a full hike by the middle of 2027.

The plunge in oil and gas prices has alleviated the pressure on the Bank of England to hike rates to contain the inflation threat posed by the Iran war.

While Governor Andrew Bailey has said it is too soon to consider resuming the rate cuts officials had planned before the conflict, economists now expect inflation to peak at levels below even the most optimistic scenarios the BOE laid out over the spring.

The UK central bank has taken a wait-and-see approach to tackling the economic fallout from the conflict, with policy already in restrictive territory heading into the war. A combination of easing energy prices and a weakening labor market could now allow the BOE to avoid hiking borrowing costs altogether.

What Bloomberg Economics Says:

“The BOE is likely to hold rates steady in 2026 as it balances above target CPI with a weak economy. Falling energy prices have reduced the risk that the current bout of elevated inflation morphs into a more persistent problem that requires a forceful response from the BOE. The prospect of looser fiscal policy following the appointment of a new prime minster will likely limit the central bank to just one 25 basis-point cut in 2027.”—Dan Hanson

Bank of Canada

• Current overnight lending rate: 2.25%

• Bloomberg Economics forecast for end of 2026: 2.5%

• Bloomberg Economics forecast for end of 2027: 3%

• Market pricing: Swaps imply slightly more than a 50% chance of a 25-basis-point increase by year end.

Canada’s economy continues to face major headwinds from US tariffs and an abrupt slowdown of non-permanent immigration. Though activity appears to have rebounded in the second quarter, the recovery follows two consecutive quarterly contractions that satisfied one technical condition of a recession and prompted economists to cut their growth forecasts for the year.

At their last meeting, Bank of Canada policymakers said the combination of economic slack and higher global energy prices poses a “dilemma” and complicated their decision making. 

But with domestic gasoline costs starting to fall and core inflation hovering near the central bank’s 2% target, upside inflation risks are fading. That should give Governor Tiff Macklem more room to dial back some of his more hawkish comments about possible rate hikes and shift focus toward a weak housing market, persistent business investment uncertainty and the soft labor market.

What Bloomberg Economics Says:

“Dull economic activity, a soft labor market, and cooling core inflation argue for the Bank of Canada to keep policy accommodative. Much of what ails the economy is beyond central bankers’ control, but policymakers have proven willing to help smooth economic activity in a ‘period of structural change.’We expect clarity on the USMCA in 2H, helping improve investment and hiring. That would open the door for the BoC to raise rates by a quarter-point to 2.5% near year-end.”—Stuart Paul

BRICS CENTRAL BANKS

People’s Bank of China

• Current 7-day reverse repo rate: 1.4%

• Bloomberg Economics forecast for end of 2026: 1.3%

• Bloomberg Economics forecast for end of 2027: 1.2%

The People’s Bank of China rolled out a new overnight reverse repo operation last week, advancing Governor Pan Gongsheng’s goal to steer short-term funding costs with sharper precision. 

The shift brings Beijing closer to the playbook of global peers like the Fed, which relies heavily on a primary overnight rate to guide the economy.

With the rate set below market expectations, some economists interpreted the move as a de facto rate cut aimed at cushioning a slowing economy. 

However, the PBOC’s decision to skip a formal public announcement on the rate itself has divided analysts, with others viewing the approach as a sign that authorities prefer to maintain the policy status quo.

What Bloomberg Economics Says:

“China’s two-speed economy is complicating the PBOC’s easing outlook. Headline growth, driven by exports and production, appears robust. Under the hood, however, domestic demand is in distress and in clear need of stimulus support. That said, a more favorable external backdrop argues for less aggressive easing. We now expect the PBOC to cut its rate by just 10 basis points to 1.3% this year and lower the reserve requirement ratio by 25 basis points — less than our previous call.”—David Qu 

Reserve Bank of India

• Current RBI repurchase rate: 5.25%

• Bloomberg Economics forecast for end of 2026: 5.5%

• Bloomberg Economics forecast for end of 2027: 5.25%

The Reserve Bank of India kept its rate unchanged at 5.25% in June, opting to wait for clearer signs that inflation pressures were becoming more broad-based. 

Minutes of the June 3-5 policy meeting showed officials expected the economic outlook to improve as tensions in the Middle East eased and saw no need for a pre-emptive rate hike, even as the RBI cut its growth forecast and raised its inflation outlook for the year through March. Governor Sanjay Malhotra said policymakers would “continue to be data dependent and remain vigilant about inflation getting generalized.”

While cooling oil prices have pushed back expectations of rate hikes, deficient rainfall is emerging as a key risk. The RBI also unveiled measures to support the rupee, including allowing banks to raise foreign-currency deposits. The measures helped the rupee to strengthen more than 2% from its record low of nearly 97 per dollar in May.

What Bloomberg Economics Says:

“We expect the RBI to keep the repo rate on hold through October as lower oil prices ease inflation. However, a rainfall deficit of about 40% and a strengthening El Niño could push inflation above the 6% tolerance ceiling by October, prompting cumulative 50 basis points of rate hikes from December. If oil falls further to around $65 a barrel in the fourth quarter, inflation should remain within the target band, allowing the RBI to extend its pause into next year.”—Abhishek Gupta

Central Bank of Brazil

• Current Selic target rate: 14.25%

• Bloomberg Economics forecast for end of 2026: 14.25%

• Bloomberg Economics forecast for end of 2027: 11%

Brazil’s central bank extended its cautious easing cycle in June despite a worsening inflation outlook, lowering the benchmark Selic by a quarter point for the third straight meeting, to 14.25%.

The central bank justified the rate cut by signaling its monetary policy will put inflation near the 3% target in the first quarter of 2028. The move reinforced economists’ expectations of another quarter-point reduction before a pause.

Policymakers led by Gabriel Galípolo have said the total size of Brazil’s cycle will depend on incoming data. In the backdrop, economic activity and inflation have accelerated. Furthermore, the board warned that demand and consumer prices could get a boost from President Luiz Inácio Lula da Silva’s stimulus measures before the October election.

What Bloomberg Economics Says:

“The Brazilian central bank is again in a bind: despite very tight policy, widespread inflation and worsening expectations raise questions about monetary policy’s effectiveness and the BCB’s willingness and ability to return inflation to target. The BCB has been here before, responding with an extra hawkish tilt. With policy already highly restrictive, this may mean holding rates through year-end before resuming gradual cuts next year — provided growth, inflation and expectations cool.”—Adriana Dupita

Bank of Russia

• Current key rate: 14.25%

• Bloomberg Economics forecast for end of 2026: 13%

• Bloomberg Economics forecast for end of 2027: 10%

Russia’s monetary easing cycle is set to continue through the end of the year, but at a slower pace. 

After the Bank of Russia unexpectedly halved the size of its rate cut to just 25 basis points and highlighted a range of new risks, market participants fear the policy makers may stick to that smaller increment at upcoming meetings.

The outlook is clouded by fiscal and external risks. As the government ramps up spending on the war in Ukraine, officials have signaled this year’s budget deficit will exceed the original plan, prompting Governor Elvira Nabiullina to vow to offset the inflationary impact. 

Lower oil prices after the US-Iran agreement and higher fuel costs following Ukrainian attacks on refineries are adding to the pressure.

What Bloomberg Economics Says:

“The Bank of Russia’s fight against stubborn inflation is again colliding with the war economy. Inflation was already on track to miss the target for a seventh straight year, and risks are now building on two fronts. Fiscal policy is set to stay looser than expected as military spending rises. More recently, Ukrainian drone strikes on Russian refineries have triggered a fuel crunch that could spill over into broader prices. That doesn’t end the cutting cycle, but it leaves much less room for easing.”—Ekaterina Vlasova

South African Reserve Bank

• Current repo average rate: 7%

• Bloomberg Economics forecast for end of 2026: 7%

• Bloomberg Economics forecast for end of 2027: 6.25%

When South African Reserve Bank policymakers meet later this month, their focus will be on the first increase in inflation expectations in more than two years, which drifted above 4%.

Officials raised their rate by 25 basis points to 7% in May, the first hike in three years, citing concerns that higher energy costs stemming from the Iran war could trigger second-round effects and feed into price expectations.

The rise in expectations justified the May hike, Governor Lesetja Kganyago said in an interview with Bloomberg on July 1, while signaling that further tightening may be needed to anchor them closer to the central bank’s 3% inflation target.

“Inflation expectations have risen,” he said. “They are above our target, and that is the concern, and that is what we should actually be responding to.”

What Bloomberg Economics Says:

“The fading oil shock should keep inflation broadly steady in the second half before it slows to the SARB’s 3% target by the end of 2027. The recent jump in inflation expectations raises the hurdle for a hold. We expect the increase in expectations to prove temporary as the oil shock fades, preventing broader price pressures from taking hold.”—Yvonne Mhango

OTHER G-20 CENTRAL BANKS

Banco de Mexico

• Current overnight rate: 6.5%

• Bloomberg Economics forecast for end of 2026: 6.5%

• Bloomberg Economics forecast for end of 2027: 6%

Mexico’s central bank held its rate steady at 6.5% in June, ending its two-year monetary easing cycle, and indicated it expects to leave borrowing costs unchanged in coming meetings. Governor Victoria Rodriguez Ceja subsequently told Bloomberg News the pause has no predetermined length.

The board is now focused on assessing whether closely-watched core inflation continues to moderate, and also on how the economy responds to a period of restrictive monetary policy.

While Banxico, as the central bank is known, acknowledged persistent weakness in economic activity, it also reiterated that upside risks remain for consumer prices. Put together, that view suggests any future policy adjustment would require greater confidence that the inflation slowdown toward the 3% target is on track.

What Bloomberg Economics Says:

“With the policy rate now neutral, above-target inflation, persistently elevated inflation expectations, and high domestic and external uncertainty have raised the bar for further easing, pointing to a prolonged pause. Even so, most policymakers retain a dovish bias, expecting economic slack to gradually bring inflation lower. Our baseline is that rates remain on hold until early 2027, when slower inflation and a wide negative output gap should allow the central bank to begin a gradual easing cycle.”—Felipe Hernandez

Bank Indonesia

• Current 7-day reverse repo rate: 5.75%

• Bloomberg Economics forecast for end of 2026: 6%

• Bloomberg Economics forecast for end of 2027: 6%

Bank Indonesia will enter the third quarter with more breathing room as pressure on the currency abates somewhat. After 100 basis points in rate hikes and a concerted effort to push up bond yields and bring in foreign flows, the rupiah has finally fallen below the key 18,000 level against the dollar. The slide in global oil prices also tempers fiscal risks weighing on bond investors.

The respite could prove temporary with the Fed seen to tighten policy later this year, eroding the spread between US and Indonesian yields. Broader concerns over President Prabowo Subianto’s increasingly interventionist policies — including a law that threatens to erode central bank independence — could also keep fund inflows on hold, capping the rupiah’s gains.

What Bloomberg Economics Says:

“Risk aversion and price pressures keep rate hikes in the pipeline, despite aggressive tightening in June. Even if oil prices remain near the pre-war range, accumulating domestic threats will keep investors wary and the rupiah under downward pressure. What’s more, inflation looks set to breach the upper end of Bank Indonesia’s 1.5%-3.5% target in the second half. The earlier oil spike is working its way along supply chains and the government’s social programs are stoking household spending.”—Tamara Henderson

Central Bank of Turkey 

• Current 1-week repo rate: 37%

• Bloomberg Economics forecast for end of 2026: 37%

• Bloomberg Economics forecast for end of 2027: 25%

Turkey’s central bank is expected to keep its main rate unchanged until September, according to a majority of analysts. 

Still, policymakers are likely to get some leeway from easing oil prices and a return to a slowdown in inflation as of June. That could allow the central bank to reduce its current funding rate of 40% this month, bringing it closer to the policy rate.

What Bloomberg Economics Says:

“Inflation is set to end the year above official forecasts, expectations remain poorly anchored and risks are two-sided, driven chiefly by Iran war uncertainty. Against that backdrop, we expect the CBRT to keep the one-week repo rate at 37% through year end. That does not mean policy will stand still, though. Policymakers will gradually shift funding from the overnight lending facility back to the repo window over the summer, lowering the effective funding rate from 40%.”—Selva Bahar Baziki

Central Bank of Nigeria

• Current central bank rate: 26.5%

• Bloomberg Economics forecast for end of 2026: 25.5%

• Bloomberg Economics forecast for end of 2027: 23%

Nigeria’s central bank will likely return to cutting rates from July, albeit cautiously as policymakers assess the impact of the US-Iran ceasefire on prices.

Officials held rates at 26.5% at their last meeting in May, projecting a moderate increase in near-term inflation.

They were, however, convinced that the energy shock would be temporary and that economic reforms were strong enough to support a return to disinflation.

Government pressure on fuel distributors to cut pump prices could further reduce transport and food costs, if successful.

Still, policymakers will keep an eye on national election campaigns that begin in August. The period is historically associated with large injections of liquidity into the economy.

What Bloomberg Economics Says:

“A sustained slowdown in inflation from the third quarter of 2026 should give Nigeria’s central bank room to resume rate cuts as early as September. The fading oil shock should push inflation lower in the second half of the year, with the harvest season helping to curb food prices in the final three months. That return to disinflation should prompt policymakers to shift from holding the policy rate at 26.5% to cutting rates.”—Yvonne Mhango

Bank of Korea

• Current base rate: 2.5%

• Bloomberg Economics forecast for end of 2026: 3%

• Bloomberg Economics forecast for end of 2027: 3.5%

The Bank of Korea enters the second half of 2026 with the focus shifting from signaling tighter policy to deciding when to deliver its first rate increase, after stronger inflation, resilient semiconductor-driven growth and rising housing risks prompted policymakers to adopt their most hawkish stance in years. The central bank next meets on July 16, with markets watching whether recent data justify moving sooner rather than later.

Beyond the near-term decision, BOK board members will also weigh whether the chip-driven expansion is broadening across the economy or remains confined to a handful of sectors, as household debt and Seoul-area home prices continue to rise. Officials have increasingly argued that monetary and macroprudential policies must work in tandem to curb financial imbalances without derailing the AI investment boom.

What Bloomberg Economics Says:

“The Bank of Korea looks set to hike. Crude prices and a weaker won are keeping inflation pressure high. Strong AI-chip demand is boosting growth, lifting exports and production. Financial conditions look too loose, with a debt-fueled stock rally adding froth. Governor Shin Hyun Song signaled the BOK should move before it’s too late. We expect a 25-basis-point hike on July 16. Three more increases should take the rate to 3.5% by the first half of 2027.”—Hyosung Kwon

Reserve Bank of Australia

• Current cash rate target: 4.35%

• Bloomberg Economics forecast for end of 2026: 4.35%

• Bloomberg Economics forecast for end of 2027: 3.35%

• Market pricing: Money markets are almost evenly split on whether policymakers will hold rates steady or hike 25 basis points by year end.

The Reserve Bank of Australia delivered a hawkish hold in June after raising rates at its first three meetings of the year. The central bank is trying to cool demand in order to bring down resurgent inflation that’s been amplified by the Middle East energy shock.

A weakening of domestic activity and the interim deal between the US and Iran have led some economists to suggest the RBA’s next move will be down. Still, the most recent update of forecasts predicted inflation would only return to the target midpoint in June 2028, based on an assumed cash rate of 4.7% at the end of this year. That’s at least one hike above the current 4.35%, suggesting the RBA will keep a hawkish bent.

What Bloomberg Economics Says:“Cooling inflation and a deepening housing slowdown have shifted the balance of risks for the RBA. Sticky inflation will likely linger, but easing energy supply pressures reduce the risk of persistent price pressures. Softer labor market and inflation data have lowered the odds of further rate hikes after the increases in February, March and May. We expect weak demand, outside data center construction, to tip policy toward easing by late 2026 if the housing downturn deepens.”—James McIntyre

Central Bank of Argentina

• Argentina’s central bank now targets monetary aggregates

Argentina hasn’t set a policy interest rate since June 2025, when it adopted a monetary-targeting framework. 

Financial conditions have been loose, with non-performing household loans at their highest since the central bank began keeping records in 2010.

Monthly inflation slowed in May to an eight-month low of 2.1%, easing from a period when war in the Middle East added pressure to consumer prices. The increase in cost-of-living is seen falling below 2% in June.

Meanwhile, President Javier Milei’s government has surpassed its year-end reserve accumulation target, buying more than $10 billion. That reserve buildup and also the nation’s improved sovereign credit ratings are together fueling expectations that Argentina may soon return to international bond markets.

What Bloomberg Economics Says: 

“While disinflation remains Milei’s signature achievement, we don’t think it must extend much further to deliver political dividends. The government appears to agree and has adjusted monetary policy to balance lower inflation against other macro goals, including growth. We expect this to continue, though tightening is likely to become unavoidable as the October 2027 election approaches, and likely unsettles markets. We look for the ON rate to remain in the low-20% zone through year-end but climb above 30% in 2027.”—Adriana Dupita

G-10 CURRENCIES AND EAST EUROPE ECONOMIES

Swiss National Bank

• Current policy rate: 0%

• Bloomberg Economics forecast for end of 2026: 0.25%

• Bloomberg Economics forecast for end of 2027: 0.5%

• Market pricing: Money markets see a relatively small chance of a hike by year end, pricing a six-basis-points move.

A temporary pickup in Swiss prices prompted by the Iran war lost momentum in June, with inflation slowing for the first time in eight months. That highlights how benign the oil shock has been in Switzerland compared with the surrounding euro zone. As higher energy costs offset the strong franc’s drag on inflation, Swiss National Bank policymakers including President Martin Schlegel can continue their wait-and-see stance.

Officials will still watch for prices falling short of forecasts. Borrowing costs are at zero and inflation is predicted to average just 0.6% this year and next. 

If geopolitical flareups prompt renewed haven flows into the franc, that’s sure to raise a red flag, as it weighs on inflation. The SNB has repeatedly stated its greater willingness to intervene against such flows. 

What Bloomberg Economics Says:

“The SNB left its rate unchanged at zero in June, but the backdrop has become more supportive. Receding deflation risks, a weaker franc and a more hawkish Fed and ECB strengthen the case for a gradual normalization of its policy. Even so, we expect the SNB to wait until December before hiking, with risks skewed toward a longer hold, while continuing to use threats of FX interventions to discourage franc appreciation.”—Jean Dalbard

Sveriges Riksbank

• Current policy rate: 1.75%

• Bloomberg Economics forecast for end of 2026: 1.75%

• Bloomberg Economics forecast for end of 2027: 2%

The Riksbank’s latest guidance from its June policy meeting suggested a 50% chance of a quarter-point increase to borrowing costs by year-end, but the recent reduction of tension in Iran suggests that hike may not materialize over the months ahead. 

Governor Erik Thedeen said in minutes of the June meeting that the central bank was shifting its course “in a slightly tighter direction” but that the “rudder angle remains small”.

The Swedish krona, the worst performing Group of 10 currency this year, has now come into focus for policy makers, with Thedeen calling it an “important factor going forward” as the board seeks to judge the risk of too high inflation.

What Bloomberg Economics Says:

“Despite progress toward a peace deal, the Iran war remains a key source of inflation and policy uncertainty. Even so, we see the Riksbank well poised to look through any near-term volatility supported by low inflation, well-anchored medium- and long-term inflation expectations, and the inflation target’s role as the benchmark for wage negotiations. We see the policy rate unchanged at 1.75% through the first half of 2027.”—Selva Bahar Baziki

Norges Bank

• Current deposit rate: 4.25%

• Central bank guidance for end of 2026: 4.5%

Norway’s rate-setters took a pause from tightening at their last meeting after having pivoted in May to respond to sticky domestic price pressure. 

They said another hike is likely “at one of the forthcoming monetary policy meetings,” with Governor Ida Wolden Bache citing signs of “somewhat higher inflation” and pledging more focus on price developments.

Norges Bank’s new policy outlook signals an equal likelihood of a 25-basis-point increase in August or September, with a 20% chance of another hike before the year-end, according to analysts. Its updated forecasts still only project core price growth declining close to its 2%-target by 2029.

Reserve Bank of New Zealand

• Current cash rate: 2.25%

• Bloomberg Economics forecast for end of 2026: 2.25%

• Bloomberg Economics forecast for end of 2027: 3%

• Market pricing: Swaps price between two and three quarter-point hikes this year with the first increase expected as soon as this week.

The Reserve Bank is expected to raise rates progressively toward the so-called neutral level at or above 3% through the remainder of 2026. 

However, whether the tightening begins as early as this month remains uncertain. Those who argue for a July hike fear inflation will get embedded in the economy, which may necessitate a more aggressive response later. Others say policymakers can wait until September because economic growth is weak and there is slack in the labor market that is curbing wages.

New measures such as disclosure of how policy committee members vote and attributing material differences in views are intended to enhance transparency of decision making going forward. That was evident at the May meeting, when the committee was unexpectedly split 3-3 and the decision to hold was made after Governor Anna Breman’s casting vote, leading investors to increase rate-hike bets.

What Bloomberg Economics Says:

“Lower oil prices should let the RBNZ rest easier in the coming months. The risk of a prolonged, broad-based inflation shock drove its line-ball decision to hold rates in May. With that risk fading, the balance of inflation risks now tilts toward the economy’s wide output gap and elevated unemployment. Weak confidence and a negative wealth effect should allow the RBNZ to look through the inflation spike and maintain an expansionary stance through the second quarter of 2027.”—James McIntyre

National Bank of Poland

• Current cash rate: 3.75%

• Median economist forecast for end of 2026: 3.75%

• Median economist forecast for end of 2027: 3.75%

Poland’s easing inflation has further diminished the prospects for rate increases, with the outlook starting to tilt toward cuts.

The central bank paused its easing cycle in recent months to gauge the impact of the Iran war on prices. But after an initial flare-up, it proved to be less acute than feared after the government imposed temporary measures to cap gasoline costs.

The months-long slowdown in inflation has been reflected in Polish policymakers’ progressively less hawkish rhetoric. Governor Adam Glapinski said in May that rates were “high enough.”

Czech National Bank

• Current cash rate: 3.75%

• Market expectation for end of 2026: 4%

The Czech central bank lifted its main rate by 25 basis points in June as domestic risks from sticky services inflation, buoyed by robust wage growth, prevailed over lower oil prices. 

The central bank defied pressure from billionaire Prime Minister Andrej Babis, who has urged it to lower borrowing costs. In fact, Governor Ales Michl pointed to the budget deficit as one of the reasons warranting tighter policy.

Investors are betting on one more hike this year, although policymakers insisted the June move wasn’t the start of a tightening cycle. 

“We want to slow growth in the money supply, we want to slow core inflation,” Michl said last month. “‘Our answer is tight monetary policy and higher rates than what we were used to before.”

© 2026 Bloomberg L.P.

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